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Saving for a deposit without sacrificing your social life

01 Oct 2018

Is it possible to watch your savings grow without watching your social life slip into the rear-view mirror? Yes, says Bank Australia’s Fitzroy Assistant Branch Manager James Butler.

The idea of saving for a home loan deposit can be terrifying, and it’s not helped by the prospect of missing out on your social life while you scrimp and save every penny. But it doesn’t have to be like that.

James Butler is Assistant Branch Manager at Bank Australia’s Fitzroy branch. Hailing from the UK, he visits home once a year, has an active social life, and still manages to meet his savings targets every month.

As Bank Australia’s unofficial Penny Whisperer, we asked James if he’d be kind enough to share some of his home loan deposit saving tips and tricks. And share he did.

Make changes, not cuts

“The question I always ask myself is, ‘Do I really need that?’ And if I do, then I’ll shop around and see if I can find the same thing cheaper,” says James. “I used to have Foxtel, and people would say ‘I can’t live without Foxtel!’ But the reality is that you can, quite easily. And there are streaming services now anyway which are cheaper, so you can save around $100 a month right there. What’s more important, this home you want to save for, or Foxtel?

“I like having some drinks after work, but I’ll go to somewhere with a happy hour, so I’ll pay $6 or $7 a pint instead of $12. It’s that kind of mentality, it’s so simple to make those changes, but still live the social life you want to live.”

Self-discipline is the key

“I’m stubborn,” says James. “I’ve set myself goals. I look at my savings, and I ask myself where I want to be in 12 months’ time. I know what my salary is, so I punch in the figures. I do want a social life, so I can put X aside for that, and X in my savings. If I can add more to that, then great. Once you get in that habit, and you begin seeing the pot grow, you don’t want it to end.”

Spend here, save there

“Obviously it can be hard when you’re younger, since your social life might be more active, but if you know you’re going to spend $100 or $200 on a night out or a weekend, then don’t spend during the week,” says James. “Make the money up somewhere else. I see people who don’t have a social life, who might be 26 years old, and have $400k in the bank. And I think, ‘Good on you!’ But at the same time, I couldn’t do that, because I do like the social aspect of my life.”

Budget for the lifestyle you want (but stick to it)

“When I get paid, I’ve already worked out how much I’m giving myself for my social life,” says James. “And the rest is divvied up into savings, bills and so on. But I know what I have to spend on me, and I just stick to it. I went to a gig the other night and found tickets for $130, then went looking around for a better deal, and found tickets for $80. So there’s $50 right there. It’s that easy.”

Be realistic, set goals

“A home is the biggest thing you’re going to buy, but you shouldn’t panic just because everyone else is on the bandwagon,” says James. “It’s scary, thinking about buying a home, but it’s just about starting with some goals. My job opened my eyes to what’s needed, when it comes to saving. The first thing is that people need to educate themselves. A lot of young people walk through the door saying they want to get a home, but they don’t realise there’s a lot more to it than just paying the mortgage. So that’s when I ask them to go back to stage one, and ask what they have in savings. They might have 25k in savings, but the reality of that in terms of saving for a home loan deposit is different. Every cent does count, and you could save yourself thousands of dollars in the long run.”

Talk to the bank

“I think people are scared of going into their bank because they just think they’ll be sold something,” says James. “But when you go in to talk about savings, there’s nothing to really sell to you. When someone comes to talk to me about saving for a home deposit or loan, I try and tell them every detail of what’s going on, because there’s so much they don’t even know about.

“Most people might choose to do research online these days, but there are so many choices, options and information out there that it can be confusing. Actually going in to talk to someone can really help clarify what’s going on, and what you need to consider. You can go in, explain your situation, tell them how much you have saved already, and ask for the best course of action for your specific situation. They should then sit you down and talk you through a solution or plan that works for you.”